License Agreement - Cornell Research Foundation

REMAINDER-EXCLUSIVE LICENSE AGREEMENT


THIS AGREEMENT, effective as of the first day of April, 1996, (hereinafter "Effective Date") by and between the CORNELL RESEARCH FOUNDATION, INC., having offices at Cornell Business & Technology Park, 20 Thornwood Drive, Suite 105, Ithaca, New York 14850, hereinafter referred to as "FOUNDATION" and NANOPHASE TECHNOLOGIES CORPORATION, having offices at 453 Commerce Street, Burr Ridge, Illinois 60521, hereinafter referred to as "LICENSEE".


W I T N E S S E T H T H A T:


WHEREAS, United States Patent No. 4,732,719, (CRF D-638) entitled "Superplastic Forging Nitride Ceramics," was issued on March 22, 1988, a copy of which is appended as Exhibit A;
WHEREAS, United States Patent No. 4,849,142, (CRF D-643) entitled "Superplastic Forging Zirconia Ceramics," was issued on July 18, 1989, a copy of which is appended as Exhibit B;
WHEREAS, United States Patent No. 4,871,496, (CRF D-639A) entitled "Composites Comprising Silicon Carbide Fibers Dispersed in Magnesia-Aluminate Matrix and Fabrication Thereof and of Other Composites by Sinter Forging," was issued on October 3, 1989, a copy of which is appended as Exhibit C;
WHEREAS, the inventions disclosed and claimed in Exhibits A, B, and C are assigned to FOUNDATION and to Jupiter Technologies, Inc., hereinafter referred to as "Jupiter," and FOUNDATION is a


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wholly owned subsidiary corporation of Cornell University and holds the ownership interests of patents issued on inventions made by Cornell University's staff and administers licenses in a manner consistent with the patent policy of Cornell University, and FOUNDATION has the sole right to issue licenses to the patents disclosed and claimed in Exhibits A, B, and C;


WHEREAS, FOUNDATION has previously granted a nonexclusive license with no right to sublicense to Jupiter for the rights to the patents disclosed and claimed in Exhibits A, B, and C in all fields of use and an exclusive license in the field of sputtering and laser ablation targets;


WHEREAS, Corning Incorporated has a nonexclusive license with no right to sublicense to make and use products claimed in Exhibit B;


WHEREAS, FOUNDATION represents that it is an assignee of the above-identified patents and has the right to grant licenses under said patents;


WHEREAS, the work leading to the inventions disclosed and claimed in Exhibits A and C was supported in part by an agency of the U.S. Government, FOUNDATION is obligated to comply with the U.S. Office of Management & Budgets Circular No. A-124, or 37 CFR Part 401;


WHEREAS, LICENSEE is desirous of securing a license under the discoveries and invention embodied in said patents to make, have made, use, have used, import, sell and have sold Licensed Products throughout the world;


WHEREAS, FOUNDATION is willing to grant a license in said


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patents to LICENSEE upon the terms and conditions hereinafter set forth;


NOR, THEREFORE, in consideration of the covenants and obligations hereinafter set forth, the parties hereto hereby agree as follows:


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DEFINITIONS


The following definitions will apply throughout this agreement:


1. Licensed Patents shall mean U.S. Patent No. 4,732,719, U.S. Patent No.
4,849,142, and U.S. Patent No. 4,871,496, and all reissues and
extensions thereof.


2. Licensed Field of Use shall mean the field of net shape
formation of ceramic articles. Without limitation or expansion of the
foregoing, the parties agree that said field shall not include laser
ablation or sputtering targets.


3. Remainder-Exclusive shall mean that FOUNDATION has previously
granted nonexclusive licenses to Jupiter and Corning, and their
successors in interest, with no right to sublicense, and an exclusive
license to Jupiter in the field of sputtering and laser ablation
targets, and that from the Effective Date henceforth, FOUNDATION
shall not issue a license in the Licensed Field of Use to another
throughout the period of


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exclusivity defined hereinbelow.


4. Licensed Products shall mean any product or use claimed
in Licensed Patents within the Licensed Field of
Use.


5. License Year shall mean each twelve (12) month period beginning
on the Effective Date of this Agreement first written above and
thereafter on the anniversary date thereof.


6. LICENSEE shall mean the above named company and any of its
affiliates in which it owns or controls at least 50% of the voting
stock.


7. Net Sales shall mean the gross amount of money billed by
LICENSEE to its customers on sale or use of Licensed Products
subsequent to the Effective Date where the Licensed Products were
either made, used or sold in the United States less: (1) trade and/or
quantity discounts, rebates and other sales price reductions; (2)
returns and allowances and brokers' and agents commissions actually
paid; and (3) retroactive price reductions; and (4) freight and other
transportation costs, including insurance charges, and duties,
tariffs, sales and excise taxes and other governmental charges based
directly on sales, turnover or delivery of the specified Licensed
Products and actually paid or allowed by LICENSEE.


8. Profitability Date shall mean the thirtieth (30th) day
following the end of LICENSEE's first two consecutive


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profitable quarters in a License Year. A quarter shall be
deemed profitable for LICENSEE under this Agreement if LICENSEE
recognized revenues from Net Sales of Licensed Products in excess of
its costs associated with the production and Sale of Licensed
Products on a fully allocated basis as determined pursuant to
LICENSEE's normal and customary cost allocation system with respect
to the sales of LICENSEE's products generally.


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GRANT


Subject only to the rights of and obligations to the U.S. Government as set forth in U.S. Office of Management & Budget Circular A-124 or 37 CFR Part 401; FOUNDATION hereby grants to LICENSEE for the term set forth below, and under the royalty basis set forth below, a Remainder-Exclusive license in the Licensed Field of Use to make, have made, use have used, import, sell or have sold Licensed Products in the United States; and said license rights shall include the right to grant sublicenses thereunder.


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TO HAVE MADE


The right of LICENSEE to make Licensed Products includes the right to have made by contract with third parties. Such


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contractual arrangements with third parties shall be subject to and conditioned upon appropriate supervision and quality assurance and control of the third party by LICENSEE and the third party shall be bound in writing to respect all rights of FOUNDATION and to supply all production of Licensed Products exclusively to LICENSEE.


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PAYMENTS IN CONSIDERATION OF THE EXECUTION OF THIS LICENSE AGREEMENT

FOUNDATION and LICENSEE hereby acknowledge and agree that LICENSEE shall make a payment of ten thousand dollars ($10,000) to FOUNDATION, five thousand dollars ($5,000) of which shall be paid upon signing of this Agreement and five thousand dollars ($5,000) of which shall be paid on the earlier of the Profitability Date or the second (2nd) anniversary of the Effective Date. Such payments shall be made as a consideration for entering into this Agreement, which sum is nonrefundable and will not be considered as an advance payment on royalties due hereunder.
V RIGHT OF FIRST NEGOTIATION TO RIGHTS IN OTHER FIELDS OF USE.


The parties acknowledge a mutual interest in the broadest possible commercial development of the technology described and claimed in the Licensed Patents. In order to fulfill this
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intent, the parties agree that if, in the future, FOUNDATION desires to grant any rights in the Licensed Patents in other than the Licensed Field of Use to any third party, FOUNDATION shall promptly notify LICENSEE and provide LICENSEE with details of the proposed license terms with such ...